Options Trading News

The talk and action in Herbalife have been on fire of late, and an unusual call trade tops option activity in the name today.

optionMONSTER's Heat Seeker system detected the sale of 8,500 January 60 calls for $10.20 against previous open interest of more than 17,000. At the same time, the trader bought 13,500 September 70 calls for $2.92 in volume that was about 6 times open interest at that strike, clearly showing that it is a new position.

This could be a new opening diagonal spread but, if so, it would be a very odd one. So it appears instead that the trader is rolling a long-call position.

Those January 60 calls are well in the money after the stock's recent gains, they they may have profited more quickly than expected. That could be leading the trader to take some profits while rolling the position to a higher, nearer-term strike to stay in the name in case it continues to move higher. (See our Education section)

HLF is down 2.35 percent to $63.98 this afternoon. Shares of the nutritional-products company have run up from $45 in the last month and hit a high of $67.45 yesterday.

Total option volume in the name today already exceeds its full-session average for the last month, with calls outpacing puts by more than 5 to 1.

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

optionMONSTER® provides stock market insight, advanced options education, and actionable trade ideas to meet the needs of do-it-yourself investors. After spending decades in the trading pits of Chicago, Jon 'DRJ' and Pete Najarian founded the company in 2005 to help people better manage their own investment portfolios.